What is strata insurance?

Strata Insurance is a specialised insurance product created to ensure that strata titled properties are adhering to the requirements of the Strata Titles Act according to each State. Strata Insurance generally covers common property as defined within the title, for example, walls, balconies, windows, roofs, floors, pools, driveways etc. The premium is typically shared between each owner and may be incorporated into their fees.

What does strata insurance cover

a.     Insured Property
Cover for loss, damage or destruction of any fixed structure that is considered part of the strata, and not individually owned. This may consist of common areas and buildings like walls, roofs, windows, common driveways, pools and gyms etc.

b.     Public or Legal Liability
Cover for costs that may be incurred in property is damaged or someone is injured within the common areas. The minimum cover required under the Act is $5,000,000.

c.     Voluntary Workers
Provides cover for death or injury to those working for the strata on a voluntary basis (ie not considered a paid employee).

d.     Fidelity Guarantee
This section provides cover for fraudulent loss of funds directly from the strata.

e.     Office Bearers Liability
Cover for an office bearer to the strata against loss from a wrongful act whilst in their capacity.

f.      Workers Compensation
Contractors can hold a strata liable if they are injured whilst working on a strata. This also provides cover to any paid workers that the strata may employ, for example gardeners, caretakers etc.

g.     Machinery Breakdown
This section covers loss or damage to or from plant and equipment, like mechanical equipment, pressure pipe systems or electronic equipment.

h.     Catastrophe Insurance
This section increases the level of cover specified in the insured property section, during the time of a catastrophic event. Due to the escalation of costs of parts and labour following a catastrophic event, your sums insured allocated might not be adequate.

i.      Government Audit Costs
Provides cover for any audit or investigation into the strata’s financial affairs by the Australian Tax Office.

j.      What does Lot Owners Fixtures covers?
Strata insurance does not cover the occupier’s own contents, nor does it provide cover when a property is rented out. Property owners require landlord insurance for cover for theft by tenants or tenant defaults. Also, strata insurance policy will have their own terms and conditions and exclusions which will need to be considered.

What does strata insurance typically not cover?

Strata insurance does not cover the occupiers own contents items or if the property is rented out, landlord cover is not covered within strata insurance. For example theft by tenants or tenant defaults.  Not to mention that each strata insurance policy will have their own terms and conditions and exclusions which will need to be considered?

Is this the only cover I need as a Resident?

It is recommended that each owner occupier obtain contents insurance and if the property is rented out, landlord protection insurance is required. As a Landlord, we highly recommend to also include some contents cover to cover items such as curtains, blinds, dishwashers and in some instances, carpets and floating floors. These policies are not compulsory, but it is within the client’s best interests to uptake these policies.

Why do I have to have workers compensation?

Workers Compensation is an insurance requirement that strata titled properties must have as per the Strata Titles Act in your state. It would be the in strata’s best interest to have workers compensation insurance as contractors can hold the strata liable if they are injured whilst working on a  strata.

What is the difference between workers compensation and voluntary workers personal accident.

Workers compensation insurance is a government regulated policy which provided cover for loss of wages and medical costs for paid employees. Voluntary Workers personal accident cover is similar, but only provided those who are working on the strata on a voluntary basis.

Where can strata insurance be purchased?